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Startups Compete With Facebook For Home Services

Home Services

Consumers who want to hire a home services professional to, say, fix a broken air conditioner, are sometimes faced with a dilemma: Who do they call for a repair? When on-demand home services platform Lula debuted in 2015, there weren’t a ton of options, but the market has since changed. Large companies, such as Facebook, are now forging partnerships with platforms to bring home service providers onto their marketplaces.

For its effort, Facebook teamed up with HandyHomeAdvisor and Porch to roll out a new feature designed to make it easier for users to find contractors, carpenters, plumbers and house cleaners on its marketplace. Through its listings, users can have visibility into a potential hire’s ratings, reviews, credentials and location. With the offering, users can also send along a description of their project and request a preliminary quote. Even with this functionality, smaller marketplaces like Lula aren’t afraid of the added competition.

“They’ve got a massive marketing budget and that’s a little more difficult to compete with,” Josh Matteson, Lula’s Internet Marketing Coordinator, told PYMNTS.com in an interview. “But, at the same time, they have so many different angles that they’re working at. We’re focused on … this one company.”

As of now, Matteson sees different home providers in a “race to the top” to carve out market share in home services’ on-demand space. Each company is seeking to carve out a niche in specific areas of the country and “there’s not one go-to right now,” Matteson said. Lula, for example, focuses on a small area just Kansas City, although it plans to expand to a few more cities in the future.

In a crowded marketplace, Lula differentiates itself from the competition in a few ways: The platform accepts less than 15 percent of all providers, for example, and provides upfront prices to consumers once they enter in their property information. Additionally, the service competes on convenience: If a consumer schedules a job for HVAC repair, they could go through the process in a little more than a minute.

Even with services like Lula, Facebook said its new offering fills a need that crops up informally on the site all the time: Users asking their social network for a home service recommendation. According to Facebook, millions of such requests are broadcast across the network per year. In fact, “more people ask for recommendations related to home services on Facebook in the U.S. than any other topic,” said Bowen Pan, product manager of the Facebook Marketplace, in a statement about the company’s home services launch.

The Home Services Market

Beyond Facebook, Amazon Home Services provides users with professionals for a slew of services that give upfront pricing. Local service providers opt in based on where they operate and the services they offer. Consumers purchasing things that require assembly or installation can use those professionals and pay for it at checkout.

Nish Lathia, general manager of Amazon Home Services, said in a the press release at the time of the service’s expansion in 2016: “Customers can search over 1,200 unique services from pros in over 60 professions — from house cleaning, to lawn work and beyond.”

However, Facebook and Amazon are not the only large players that have entered the home services space: Walmart, too, has announced that it is partnering with Handy to offer customers, at more than 2,000 of its stores, installation and assembly services. Customers can purchase the company’s at-home services while checking out in the store, then simply schedule an appointment with a qualified local professional to perform the tasks.

The idea behind Walmart’s service was to “eliminate the friction of installation and assembly, and offer customers a convenient … experience from start to finish,” said Daniel Eckert, senior vice president of Walmart Services and Digital Acceleration, in March.

Though it remains to be seen if Walmart will roll out other service offerings, Facebook’s expansion into home services is one of many new categories that have been added to Facebook’s Marketplace as of late. Home rentals and cars are also searchable. And, as of last year, Marketplace was growing at a rate of 18 million new listings per month.

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